Form 1 (Vendor’s Statement)

The Land and Business (Sale and Conveyancing) Act 1994 (LBSCA) obligates the vendor of a residential land to provide a proposed purchaser with a statement that sets out:

• the rights of a purchaser under section 5 of the LBSCA; and
• certain particulars as required by regulations, such as
  • all mortgages, charges and prescribed encumbrances affecting the land being sold; and
  • any transaction relating to the acquisition of the interest (i.e. the land) within 12 months before the date of the contract of sale; and
  • any prescribed matters.

What is considered an acquisition of interest in the land?

• obtaining title to the land; or
• obtaining an option to purchase the land; or
• entering into a contract to purchase the land; or
• obtaining an interest in the land of a category prescribed by regulations.

When should the Form 1 be served?

The Vendor is required to serve a signed Form 1, at least 10 clear business days before the date of settlement

Who can prepare a Form 1?

The Form 1 can be prepared by either the vendor’s conveyancer or solicitor or the vendor’s real estate agent.

Who is responsible for the accuracy of the Form 1?

This is a very common question by both vendors and purchasers.

If there is an agent acting on behalf of the vendor, it is the agent’s responsibility to ensure that

• the prescribed enquiries are made into the matters as to which particulars are required in the statement; and
• the agent is required to sign a certificate in the form required by regulation noting that:
  • the responses to the inquiries reflect the completeness and accuracy of the particulars contained in the Form 1; or
  • subject to stated exceptions, the responses to the inquiries reflect the completeness and accuracy of the Form 1.

Where do the responses to the inquiries come from?

A standard Form 1 would generally contain prescribed inquiries such as

• the local government (council)
• Land Services SA
• Revenue SA (certificate of Emergency Services Levy and certificate of Land Tax payable)
• SA Water (certificate of water and sewerage charges and encumbrances)
• a property interest report containing title and valuation details, any registered or unregistered documents lodged within the last 90 days on the property, a copy of a register search for the certificate of title; and any government interests associated with the land.
• a range of different state government bodies (e.g. State Planning Commission in the Department for Trade and Investment)
• If there is a lease, documenting relating to the Residential Tenancy Agreement including any extensions if applicable.
• If the title is a community lot or a strata unit (see our article on buying a home), it may include community/strata corporation inquiries and statements.

How to interpret a Form 1

While we do not recommend reviewing the Form 1 on your own (unless you are a qualified professional), the Form 1 is generally broken down into the following divisions

• Mortgage of land
• Lease, agreement for lease, tenancy agreement or licence
• Caveat
• Lien or notice of a lien
• Charge of any kind affecting the land (not included in other items; and
• is registered on the certificate of title to the land; and
• is to be discharged or satisfied prior to or at settlement.

Amongst other things, there are three (3) important columns to look for in each item

• Is the item applicable?
• Will it be discharged or satisfied at or prior to settlement?
• Are there any attachments?

For instance, Item 1.1 may disclose a Mortgage of land that is registered on the certificate of title. In almost all cases, a mortgage is discharged prior to or at settlement.

Tips for vendors

• If you are a vendor, you must ensure that you provide and disclose any information known to you, that may affect the land in any particular way. It is best to discuss with you conveyancer or solicitor and/or your real estate agent.
• If your property is going live soon, it is best to instruct your conveyancer or solicitor as soon as possible, as the property searches that need to be ordered can take up to 8 working days.
• If you are selling via auction, you must have the Form 1 ready and o display three (3) consecutive business days immediately preceding the auction; and at the place at which the auction is to be conducted for at least 30 minutes immediately before the auction commences. Please check with your real estate agent about this.
• Contact your conveyancer or solicitor as soon as you intend to sell the property.

Tips for purchasers

• Reach out to your conveyancer or solicitor as soon as you have signed a contract of sale and received the Form 1.
• Your cooling off period expires two (2) clear business days after the Form 1 has been served. The day of service is not counted.
• If you are purchasing at an auction, you do not have cooling off rights.